Money Makeover | How to start a business
Prevent Poor Performance: Lwandile and his wife plan to start a cleaning business.A good idea doesn’t make a business. Executing a successful venture requires proper planning and hard work, writesA business plan is without doubt the most important work you can do before starting your business.
“We had to estimate the price we could charge and then work out when the business would break even. That was challenging, even with a mathematical background,” says Lwandile, who has previously owned a business.READ: Making a plan to protect your legacy “A good idea doesn’t make a business. You need to know your own business on both the operations and finance side. We see business owners applying for finance, but when we ask them some basic questions about the financials, they say: ‘Speak to my accountant. ’I wouldn’t trust someone who doesn’t know their business plan,” says Madonela, who adds that, as a business owner, you need to understand basic accounting terms such as profit margins and ebitda .
Lwandile wants to focus the business in Vanderbijlpark in the south of Gauteng, as this is where his in-laws live. However, he is not sure of the market demand. He has done his research and found that there are no established cleaning businesses in the area. This could be either a positive or negative factor. It may be that there is insufficient demand or it is a golden opportunity to be the first.
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